An abbreviated version of a textbook that college bookstores and publishers provide students to eliminate the resale market for that specific title. The custom edition usually has the university's name on the cover, further preventing students from reselling the book.
Professors agree to use custom editions because publisher representatives (from companies like Houghton Mifflin, McGraw Hill, and Pearson) tell them the book will be available at a cheaper price point than a student could buy the non-custom edition for. The publisher reps conveniently never include online marketplace price points - so students regularly get screwed.
My professor assigned a custom edition of Campbells Biology. The bookstore was trying to sell me that customized book for $70, but I found the full version of the same book online for $10. The full version is so cheap because people all over the country are buying and selling it, which drives the price down.